NEW YORK (Reuters) - Boeing Co <BA.N> reported a
greater-than-expected 38 percent jump in first-quarter profit
on Wednesday as increased deliveries of its commercial planes
offset a dip in military sales, and manufacturing operations
became more efficient.

The Chicago-based company, which vies with EADS <EAD.PA>
unit Airbus in the lucrative jetliner market, kept its
full-year profit target unchanged and forecast next year's
earnings in line with Wall Street estimates, despite problems
getting its new 787 Dreamliner in the air.

Boeing, which is also the Pentagon's No. 2 supplier,
reported quarterly profit of $1.2 billion, or $1.62 per share,
compared with $877 million, or $1.13 per share, a year earlier.

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The results easily beat Wall Street's average earnings
forecast of $1.36 per share, according to Reuters Estimates.

Boeing shares rose 2.7 percent to $80.71 in early New York
Stock Exchange trading. At Tuesday's close, they had fallen 27
percent since last July, dogged by 787 delays.

"It's pretty amazing they beat consensus by 20 percent,"
said Paul Nisbet at aerospace specialists JSA Research. "The
high rate of operating margin was a big jump -- the volume is
beginning to pay off. With the high demand for aircraft, they
are getting good prices."

Operating margin at the commercial plane unit jumped nearly
3 percentage points to 12 percent, as Boeing's massive
manufacturing operations became more efficient as the company
works through a record order book. Its defense unit operating
margin rose slightly to 11.4 percent.

Boeing now has an unprecedented $271 billion worth of
commercial planes on its order book, pumped up by a three-year
boom in aircraft sales. It also has $75 billion worth of
defense orders.

Boeing's defense unit, which is the U.S. No. 2 defense
contractor behind Lockheed Martin Corp <LMT.N>, posted a 2
percent drop in revenue to $7.6 billion, hurt by lower
deliveries of military aircraft.

The unit lost out to rival Northrop Grumman <NOC.N> and its
partner EADS in a $35 billion refueling tanker program for the
U.S. Air Force in February, but it is protesting the award.

Boeing held its earnings forecast of $5.70 to $5.85 per
share for the full year, below the analysts' average outlook of

$5.95.

For next year, it forecast earnings of $6.80 to $7 per
share, in line with analysts' expectations of $6.96.

Wall Street has been forced to tone down its hopes for
Boeing's profit next year due to repeated delays on the highly
anticipated, fuel-efficient 787.

The company had originally planned to deliver 112 of its
787s by the end of 2009, but has scaled that back to 25 after
three major delays pushed the program 15 months behind
schedule.

Boeing said on Wednesday that it was sticking to the latest
targets, issued two weeks ago, despite continuing problems with
slower-than-expected completion of work from its suppliers and
unexpected reworking on parts of the plane.

The company held its latest target of first flight in the
fourth quarter of this year and first delivery in the third
quarter of next year. The first 787 was originally scheduled to
be handed over to Japan's All Nippon Airways <9202.T> next
month.

Boeing's commercial planes unit repeated its forecast of
delivering 475 to 480 planes this year, and set a target of 500
to 505 planes next year, including the 25 787s.